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The central intent of this econometric case study analysis is to examine the relationship between discounting room rates and hotel financial performance. The study provides a theoretical framework that investigates the fundamentals of discounting and empirically assesses the efficacy of the discounting process in the lodging industry. The study adopts an error correction model to properly account for the dynamics of the industry. The results indicate that the variables may be modeled as an integrated process that are linked in the long run and also possess a short-term relationship. The research findings suggest that discounting works both in the short-term and the long-term only if the discount rate exhibits serial correlation or nonstationary tendencies.

The purpose of this study is to apply the cultural tourism typology of McKercher and to estimate the economic relevance of cultural tourism to the context of a small island destination tourist market. Small island destinations may be confronted with environmental constraints that restrain the traditional small island tourism development model, which is based on sun, sand, and sea. The cultural tourism typology is used in order to determine whether the typology may be used to segment tourists thereby allowing researchers to determine the economic impact of different cultural tourist segments. This study draws attention to some of the foundational issues that researchers face when attempting to quantify the economic impact of cultural tourists. The results of the study indicate that McKercher’s typology may provide more refined results when incorporating the purpose of a trip; and, that cultural tourists may be a lucrative market for destinations to pursue given the results of an economic input–output model.